Big changes on the way for the Dow industrials

The Dow Jones industrial average is getting a new look, with one of Wall Street's oldest names getting added to the mix.

While the Dow tinkers with its 30 components periodically, often with only modest fanfare, this one will be noticed.

Gone are Alcoa, the company that traditionally kicks off earnings season, along with Bank of America, which is the second-largest financial institution in the U.S., and Hewlett-Packard, which has been in the blue chip index for 16 years.

Changing of the guard at the Dow

Goldman Sachs, Visa and Nike are replacing Bank of America, Hewlett-Packard and Alcoa on the Dow at the open of trading on September 23rd. David Blitzer, S&P 500 Index committee chairman, weighs in.

The changes take effect after the close of trading Sept. 20 and mark the first new names in two years.

The moves will cause alterations to the way the index is weighted.

Visa and Goldman Sachs will have the second- and third-highest respective weightings, according to Bespoke Investment Group.

"By definition then, the Dow is going to look and act very differently going forward," said Dan Greenhaus, chief market strategist at BTIG. "Leaving aside NKE/HPQ, you've replaced two stocks that essentially don't matter in AA and BAC with two that do."

Also, the divisor Dow Jones uses to calculate the index will change to the point where a $1 move in any stock will move the index 6.5 points, compared with the previous 7.7 points.

Along with being a target for Wall Street critics, Goldman brings heft to the index both in reputation and share value.

Stock price, in fact, is what drove the three-for-three move, the most ambitious change for the index since 2004.

"We have made some big steps in terms of improving the index," David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, told CNBC. The Dow is "price-weighted, and very low-priced stocks have very little impact."

The three stocks leaving had an average price of $15 while the new ones average $134.50.